Santos Cooper/Eromanga Basins CCUSDEM 2018 Oil and Gas Roundtable

November 2018

Large scale CCS of Santos & 3rd Party CO2 provides a pathway to a zero emissions future.

Santos CCUS Vision

TARGET ZERO NET EMISSIONS

3rd PARTY CO2 TRANSMISSION & STORAGE

FULL-SCALE SANTOS CCS

INFRASTRUCTURE

CCUS: ENHANCED OIL RECOVERY (EOR)

RESOURCE / RESERVE BOOKING

RESERVOIR DE-RISKING FOU

ND

ATI

ON

Name Location Operation date Industry

Capture capacity (Mtpa)

Type

Terrell Natural Gas Processing Plant (formerly Val Verde) USA 1972 Natural Gas Processing 0.5 EOREnid Fertilizer USA 1982 Fertiliser Production 0.7 EORShute Creek Gas Processing Plant USA 1986 Natural Gas Processing 7.0 EORSleipner CO2 Storage 1 Norway 1996 Natural Gas Processing 1.0 CCSGreat Plains Synfuels Plant and Weyburn-Midale Canada 2000 Synthetic Natural Gas 3.0 EORSnøhvit CO2 Storage 1 Norway 2008 Natural Gas Processing 0.7 CCSCentury Plant USA 2010 Natural Gas Processing 8.4 EORAir Products Steam Methane Reformer USA 2013 Hydrogen Production 1.0 EORCoffeyville Gasification Plant USA 2013 Fertiliser Production 1.0 EORLost Cabin Gas Plant USA 2013 Natural Gas Processing 0.9 EORPetrobras Santos Basin Pre-Salt Oil Field CCS 1 Brazil 2013 Natural Gas Processing 1.0 EORBoundary Dam Carbon Capture and Storage Canada 2014 Power Generation 1.0 EORQuest Canada 2015 Hydrogen Production 1.0 CCSUthmaniyah CO2-EOR Demonstration Saudi Arabia 2015 Natural Gas Processing 0.8 EORAbu Dhabi CCS (Phase 1 being Emirates Steel Industries) UAE 2016 Iron and Steel Production 0.8 EORIllinois Industrial Carbon Capture and Storage USA 2017 Ethanol Production 1.0 CCSPetra Nova Carbon Capture USA 2017 Power Generation 1.4 EOR

Global CCS Projects

Carbon Capture and Storage

+ 17 large-scale (>0.4 Mtpa) Carbon Capture projects presently in operation worldwide

• 13 of these are for EOR

• Capture capacity ranges from 0.5 – 8.4 Mtpa (Moomba Gas Plant ~ 1.9 Mtpa Vent + 0.5 Mtpa Fuel, Flare, Fugitive)

• Primary market is North America

• 4 additional projects under construction including Gorgon Project in Australia (3.4 – 4.0 Mtpa)

Source: Global CCS Institute, https://www.globalccsinstitute.com/projects/large-scale-ccs-projects1 Offshore Operation

+ 12 out of 17 global large scale CCS projects are in North America

+ 10 of these projects supply CO2 for EOR

+ Access both natural & industrial CO2 sources

+ Growth has slowed in recent years primarily due to limits on accessible, affordable CO2supply

+ Significant operations in Permian Basin

+ Large midstream company Kinder Morgan, with substantial CO2 distribution assets, also has upstream assets with nearly 100% of production (55kbbl) associated with EOR

Global Leaders – North America

Carbon Capture and Storage

Global CCS Projects (particularly USA):

Onshore Operations

EOR Focus

Oil field practices well accepted by community & regulator.

Tax/Royalty Fiscal Regime

Natural & Industrial CO2 Sources

Established and extensive CO2 capture & transmission infrastructure

Suitable reservoirs

Santos Cooper/Eromanga Basin Operations:

Onshore Operations

Mature Oil Fields (EOR target)

Oil field practices well accepted by community & regulator.

Tax/Royalty Fiscal Regime

Industrial CO2 source – Moomba Gas Plant

Existing CO2 separation facilities at Moomba Gas Plant. Requirement to establish capture & transmission infrastructure.

Assessing suitable reservoirs

Santos’ Cooper/Eromanga Basin asset is well positioned to develop CCS with EOR (CCUS)

Santos - Where we stand

Santos EOR History in relation to Australian and global milestones.

Carbon Capture, Utilisation and Storage History

1980s1970s 1990s 2000s 2010s

B. Santos Tirrawarra EOR

A. CCS CO2-EOR Permian Basin (USA)

E. Slepiner CCS (Norway)

C. Santos Mereenie CH4 Injection

CCSA

E

J

CB,D,G,H

A. World first use of CCS for CO2 miscible flood in SACROC formation, Permian Basin USA, 1972.B. Santos first volatile oil EOR project – ethane injection for recovery of condensate, ~ 7 MMstb incremental production.C. Santos use of methane injection for pressure support in Mereenie oil field, ~2.3 MMstb cumulative production.D. Santos implementation of waterflood in the Dullingari field for secondary recovery. ~3.5 MMstb incremental production.E. World first CCS for geological storage – implemented in Sleipner gas field, North Sea – driven by Norwegian tax on CO2 emissions. Also world’s first offshore CCS.F. Santos further implementation of waterflood in the Eromanga Basin for secondary recovery – Mulberry, Endeavour, Talgeberry, Gimboola, Cranstoun, Merrimelia, Charo. ~3.5 

MMstb incremental production. G. Santos Fly Lake EOR – methane injection for recovery of volatile oils, ~0.9 MMstb incremental production.  Recent operation limited by gas availability.H. Australia’s first CCS for geological storage, Gorgon Gas Facility. Driven by emissions strategy required for sanction.I. Formation of Santos Energy Solutions Team, renewed focus on CCUS EOR opportunity.J. Target – 2019 Santos CO2 injection pilot (Single Well Injection Test)

I

antos Fly Lake EOR

D. Santos Dullingari Wat

tos Cooper Oil Waterflood

CO2 EOR is a long established and scalable base oil-field business. It is driven by economics and reservoir characteristics rather than new technologies

Key Learnings From The US

Kinder Morgan’s Tall Cotton Facility – Greenfield ROZ Production

LEARNINGS

+ CO2 business is normal oil-field practice

+ Significant STO advantage with both CO2 source & targets

+ CO2 EOR can be phased, scaled & replicated development (Core Energy)

+ Key metric US$2/Mcf CO2 delivered at pressure to field

+ Compression requirements (major CAPEX/OPEX driver)

+ Key to appraisal activities is asking right questions – injection test to assess residual saturation, core flooding to estimate recovery

+ Greatest uncertainty for STO is suitability of reservoirs – project driven by subsurface workflow PRIMARY FOCUS

ENGAGEMENT

+ Operators, service providers and consultants engaged for input to appraisal activities, pilot scoping, concept select/design & reserves justification

+ Maintaining dialogue with peers for feedback on technical deliverables and appraisal well objectives

Cooper Basin CCUS – simple schematic

CO2 VENTFUEL/FLARE

Moomba Gas Processing & Liquids Separation Plant

CAPTURE TRANSMISSION

INJECTIONRECYCLE

SALES GASTO MARKET

LIQUIDS PROCESSING

OIL RESERVOIR CO2 FLOOD

RAW GAS with CO2

GAS RESERVOIR10 – 35% CO2

Santos has a ready supply of reservoir CO2 which is separated and vented at Moomba Gas Plant. The potential for this CO2 to be used for a CCUS project is currently being evaluated.

Enhanced Oil Recovery (EOR)

Some injected CO2 remains in situ, remainder is recovered and re-injected

Evaluation of CO2 delivery costs & scalability

Full implementation will require substantial infrastructure investment

STORAGE?

CO2-EOR: Suitability of Reservoirs

Both Jurassic and Permian reservoirs in the Cooper/Eromanga Basins appear to be suitable for miscible CO2 flooding EOR.

Fluid/Reservoir Characteristic

Miscible Flood Requirement

CO2-EOR Analogues (USA) 1

Eromanga Basin Jurassic Oil

Cooper BasinPermian Oil

Depth > 3000ft 3,000 2 – 11,600ft 4,000 – 6000ft 10,000ft

API Oil Gravity > 25 28 - 42 47 50

Viscosity < 10 cP 0.4 – 6.0 cP 0.8 cP 0.1 cP

Permeability - 1 – 100s mD 100s – 1000s mD 0.1 – 1 mD

Temperature 80 – 285 degF 80 – 260 degF 190 degF 280 degF

Residual Oil > 25% 27 – 90 % Assess 1H 2019 up to 80 %

MPP Achievable Yes 93 % of fields miscible flood.

Positive lab test results. Confirmed

Other positive factorsGood waterflood performance

(good sweep efficiency, reasonable throughput rates and good

voidage balance)

Extensive CO2infrastructure

Large potential volumes in Residual

Oil Zone (ROZ)

Previous ethane flood.Well studied &

understood reservoirs.

Negative FactorsSevere reservoir heterogeneity,adjacent loss zones (gas caps),

dominant fracture systemsn/a

Confirmation of ROZ properties required

(coring)

Low permeability requires close well

spacing, facilitycomplexity ($$$)

1 Enhanced Oil Recovery (EOR) Survey 2012, Penn Energy Research, as published in Oil & Gas Journal, April 2, 20122 Depths as shallow as 1,150ft for Salt Creek Field operated by Anadarko, however majority of fields are over the 3000ft threshold

HISTORIC OIL PRODUCTION

US informed subsurface (uncertainty) workflow and appraisal plan.

Subsurface overview – key uncertainties

1. Fluid sampling & Analysis Main Pay Zone (MPZ) – Existing well, assess miscibility of CO2 and oil,(i.e. determine whether CO2 flooding is technically feasible)

2. Drill & core appraisal well(s) in Residual Oil Zone (ROZ) – Assess residual saturations (Sor) anddefine oil volume in place (i.e. establish the size of the prize)

2a. Core Flooding – Assess fraction of recoverable oil and CO2 utilisation efficiency (i.e. definerecoverable volumes)

3. Single Well Injection Tests (SWIT) – Assess in situ application of miscibility and demonstratemobility of previously immobile oil (i.e. confirm miscibility & recovery at reservoir conditions)

1

2

32a

(INITIAL)(POST-PRODUCTION)

MAY 2018

1H 2019

Q3 2019

SIGNIFICANTLY GREATER POTENTIAL VOLUMES CONTAINED IN ROZ

2ROZ OIP

Sor = ?

UNCERTAINTY

INIT

IAL

SATU

RA

TIO

N

Opportunity progressing as per roadmap; prove feasibility by 2H 2019.

Cooper Basin CCUS Project

CO2 Injection Wellhead – Yates Field, W. Texas (Kinder Morgan)

Project Roadmap ISSUED

Concept Refresho Cost estimates for 20+ technology conceptso Estimated cost of CO2 delivery 50% lower than US

benchmark of $2/Mcf

COMPLETE

Fluid Sampling & Analysiso Sampling complete, Gidgealpa oils suitable for miscible

flood.COMPLETE

Subsurface Workflowo Static models & preliminary reservoir analysis completeo Reservoir simulation underway.

APPRAISALSANCTIONED

+ Drilling & Coring Activitieso Workshop covering specialized coring activities and

operations integration (Nov 2018).Q1 2019

+ Single Well Injection Test (SWIT)o Collaboration – CSIRO, Halliburton, CTIo Suppliers engaged for supply of CO2

Q3 2019

+ Feasibility 2H 2019

+ Sanction Small Scale Development 2020

+ EPC Facilities + Subsurface Development 2020-22

+ CO2 Injection Commences 2022

+ First Incremental CO2 EOR Production ~2023

CU

RR

ENT

PLA

NFU

TUR

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CTI

VIT

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PR

OJE

CTE

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~26km

Cooper Basin CCUS Opportunity Summary

Draw on experience & success in the US

Leverage mature asset base in the Cooper Basin to grow production & reserves

CO2 available from Moomba Gas Plant at globally competitive cost

Opportunity for substantial long-term infrastructure investment

Successful implementation could lead to transport and utilisation of 3rd Party CO2

Carbon capture, utilisation & storage (CCUS) can convert an emissions liability into a revenue stream.